William M Connolley wrote:
On Mon, 15 Jan 2007, James Annan wrote:
> After all, we cannot simply assume that future generations are richer,
And yet this *is* the assumption that all the economic modelling makes. And it
is supported by historical trends. Barring catastrophe, is there a plausible
reason for it to be wrong (presumably in cash-type terms, interpreting "richer"
literally)?
Yes, recent economic history in the U.S. suggests a real ongoing
decline in the real wealth of the average person.
The Stern report ends up deciding that a potential loss of 20% of future
consumption would be very bad, which is a loss on top of considerable gains. If
you can plausibly assert that we wouldn't be richer at all, then in Stern terms
this is a complete disaster, with or without climate change.
-W.
The big problem is that our use of fossil fuels has ment that out
energy sources are easier to use and more concentrated than was the
situation in previous times. As these energy sources become harder to
acquire, we in the U.S. are seeing a trend toward less equitable
distribution of wealth (as in, money), such that the average person is
less well off. A very large fraction of the population is just getting
by, spending all of their pay check each month with little savings.
That our recent economic history appears to show a continual gain in
"wealth" is something of an illusion, as it is based on the one time
consumption of stored energy "capital" in fossil fuels.
When world oil production peaks and the cost of energy begins to rise
relative to everything else, I would expect to see a replay of the
economic distress of the late 1970's and early 1980's. However, next
time we get in this situation, there won't be any easily available
cheap alternative energy source except coal. The last time around, the
Saudi's had excess oil production capacity, which allowed them to flood
the world market and thus force prices down. I think the economists
assume that science will save us as has happened in the past, with a
somewhat magical appearance of a technical solution which will "keep
the economy moving" -- literally.
I see at least two problems with this notion. The first is that there
are no such easy solutions to be found in today's science, to my
knowledge. The second is the amount of time required for market
penetration of any new energy source and the large shift in wealth
required to implement this new, untested energy supply. Our use of the
energy in fossil fuels has dictated the mix of devices which have been
built to use that energy. A major shift in energy supply is also
likely to result in major changes in the devices which use energy,
which could include junking large portions of what we take as part of
our normal life styles in the U.S. and other "developed" nations. The
first response is to try and build energy systems which would allow all
the things we now have to continue to be used, such as houses and
automobiles and the patterns of development connected to the two which
we have come to accept as normal. But, should it turn out that the
new magical energy source can't be fitted into the present modes of
life, then what? We won't know an answer to that until AFTER the new
magical energy source is found, if one IS found.
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